Well, did we expect anything less in regard to Tariffs on Tuesday and the back and forth jabs by both countries? I am not totally certain, but it sure seems to me more of one new administration not really liking or wanting to work with our administration as the drug issue is very thin on accurate facts. It does leave all of us in the middle, not really sure what to think about this.
It is truly easy to throw out a statement that tariffs start on March the 4th for these amounts. However it is just not that easy, for instance how are the tariffs going to be collected and by whom? On the automotive side it is even worse as parts cross the border a number of times, and here again, what gets charged and how much and how many times and who is responsible to collect this? The point being is the threat and the actual implementation are two totally different things. We currently have no details and it appears none are about to appear on either side of the border any time soon. This leaves the markets and its participants and corporations in a huge position of uncertainty. We have seen the first reaction and that has been to sell first and ask questions later. To be very fair and honest, the markets were overvalued and maybe this is the catalyst that gets things back in line. I do believe we are currently oversold and we could see a little bounce. I also think in the next few weeks we could get delays on the tariffs with more volatile moves in the market.
The current themes of AI development , data center build out, and the need for more power are still intact. In the meantime we are going to ride this out and wait for facts, and buy some undervalued positions that fit in the above themes. The objective is to not try to get caught up in the headlines but deal with the facts when we get them.
I look forward to providing more updates as we work through this.